Lonmin community builds leader a palace with funds, probe finds
JOHANNESBURG – South Africa’s Bapo Ba Mogale community has exhausted almost all the proceeds it received from platinum miner Lonmin over the past 20 years, including spending $5.8-million on a leader’s palace, a corruption probe has found.
The fund currently has little more than it had in 1994, when South Africa’s first democratic elections were held, despite R617-million ($44-million) of royalties from Lonmin, Public Protector Thuli Madonsela told community members Friday, according to a statement from her office.
“What this means is that, basically, all of the money earned has been spent,” said Madonsela, whose term as the country’s graft ombud expires in October. Members of the Bapo community had asked her office to investigate after “allegations of systemic looting,” the public protector said.
Lonmin, the world’s third-largest platinum producer, paid into the fund for 20 years before the community’s royalties were converted into equity in a series of so-called black economic empowerment deals in 2014. BEE legislation requires companies to be part-owned by racial groups who were disadvantaged under whites-only rule.
Palace Spending
The biggest item of the fund’s expenditure was a palace for one of the community’s leaders, the public protector said. Its initial budget was R20-million but eventually R80-million rand was spent.
Further investigation “will establish who the beneficiaries were, if procedures were followed and if there was value for money,” the public protector said.
Calls to Lonmin and the Bapo Ba Mogale community weren’t immediately returned.
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